Today in Retail: Amazon Says Labor Shortfall Holding Back Capacity; Chip Shortage Keeps Getting Worse

In today’s top retail news, Amazon says its inability to hire enough workers is hampering its capacity to fulfill orders efficiently, while the global semiconductor shortage is still getting worse almost a year into the crisis. Also, Skechers says supply chain issues will likely persist into 2022, and small and medium-sized businesses (SMBs) are pushing a “buy local” message while still facing challenges brought on by the pandemic.

Amazon Warns of Billions in Additional Costs to Meet Holiday Demand

Amazon executives say increased capacity in the eCommerce company’s fulfillment network will help ensure it can meet demand for holiday shopping in the coming weeks, but the ongoing labor shortage is increasing costs and causing inefficiencies. Amazon said in a news release that net sales increased 15% to nearly $110.8 billion in the third quarter. Net product sales accounted for $54.9 billion, up 4% compared to 2020, and net service sales totaled $55.9 billion, a 29% year-over-year increase.

No End in Sight for Global Chip Shortage

The global semiconductor shortage is getting worse almost a year into the crisis, with longer wait times, increased hoarding by those who are lucky enough to score the chips and no end in sight, according to a report in The Wall Street Journal. Wait times for chip deliveries lengthened to an average of 19 weeks this summer and 22 weeks or more this month, with reports of a 25-week wait for power-management components and a 38-week delay for microcontrollers for vehicle manufacturers.

Skechers Expects Supply Chain Constraints Into 2022

Global footwear brand Skechers kept its 2021 momentum going with third-quarter sales of $1.55 billion for the three-month period that ended Sept. 30, up almost 20% from the same time a year ago, even as supply chain bottlenecks continue to suppress inventory. In the quarter, Skechers’ direct-to-consumer (D2C) sales jumped 44.1% and wholesale sales were up 10.5%.

SMBs Tout Local Shopping as Salve for Supply Chain Issues, but Concerns Still Loom

As shortages of supplies and labor continue to plague businesses and retailers across the country, many small and medium-sized businesses (SMBs) are pushing an age-old message: come shop with us. SMBs aren’t immune to the issues plaguing the larger economy. Over three-quarters of Main Street SMBs say their local communities have yet to recover from the pandemic’s impact, according to PYMNTS’ research, and are facing increased prices from suppliers, difficulty obtaining necessary equipment or supplies, and an insufficient pool of workers from which to hire.